Is Buy Here, Pay Here a Good Idea?

If you’re shopping for a car in the Waterbury area, you may be wondering: “Is buy here, pay here a good idea?” If you have challenged credit, this form of financing can work in your favor. What is buy here, pay here financing? Find out whether buy here, pay here car lots are reputable and what the possible pros and cons are in this guide from the finance team at Honda of Watertown.

What Are the Benefits of Buy Here, Pay Here?

Buy here, pay here financing is when the dealer takes on the role of both seller and lender, meaning you’ll make payments to the dealer instead of a bank or another financial institution. Are buy here, pay here car lots reputable? If you are shopping for a used vehicle, there are several advantages to in-house car financing, depending on your individual situation. Here are a few examples:

• Quick Service: When you finance through a dealership, you can get a loan almost immediately. The dealer will provide you with a guaranteed auto loan approval on the spot, assuming you meet their requirements.
• Flexible Loan Terms: Financing through a dealership gives you more control over the terms of your loan than you would get with a bank. This is especially true if you have bad credit or no credit at all.
• Agreeable Interest Rates: In many cases, the interest rates offered at a buy here, pay here dealership are on par with those offered by conventional lenders. That being said, it’s a good idea to shop around if you’re given an interest rate estimate that seems high.
• Workable Down Payments: If you don’t have the cash upfront to make a down-payment, buy here, pay here financing can be a good option. Many in-house financing dealerships don’t expect down payments from borrowers, and even if they do, they tend to be more reasonable than your average lender.

What to Consider

Are buy here, pay here car lots bad? No, but you should keep in mind that this form of financing isn’t for everyone. Here are a couple of potential disadvantages you should take into consideration:

• Credit Bureau Reporting: Not all dealerships that offer in-house financing report to the major credit bureaus. This means that even if you make payments on time, your credit score may not reflect it. Make sure to find out ahead of time if the dealership reports to the credit bureaus.
• Vehicle Tracking: Some in-house financing dealerships install a tracking device in their borrowers’ vehicles. This makes it easier for them to locate and repossess the vehicle if the borrower can no longer make payments.

Learn More About Your Financing Options at Honda of Watertown

Is buy here, pay here a good idea? It can be if you have less-than-deal credit, as it offers advantages that may not be available through a more traditional lender. At our dealership near Southbury and Torrington, we can help you secure a payment plan that will work with your budget so you can get behind the wheel of the vehicle you need today. Find out if paying off your car loan early is right for you. Feel free to contact us to learn more.